Business Publications
Document Type
Article
Publication Date
4-2021
Volume
67
Issue
1
Journal
Journal of Corporate Finance
URL with Digital Object Identifier
https://doi.org/10.1016/j.jcorpfin.2020.101803
Abstract
Analyst talent, rather than the number of analysts following a firm, matters most to investors. We find: 1) Analysts with greater “natural” forecasting talent—controlling for experience, brokerage affiliation, and task complexity—contribute relatively more firm-specific rather than industry or market information; 2) Earnings forecasts by low-talent analysts may lead to substantial mispricing; 3) When earnings surprises are large, post-earnings-announcement drift is more prominent among firms covered by low-talent analysts; 4) Firms with low-talent analysts have significantly more insider trading prior to positive earnings news; and 5) Investing following insider trading is more profitable in stocks followed by low-talent analysts.
Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.
Citation of this paper:
Dang, C., Foerster, S., Li, Z.F., Tang, Z. 2020. Analyst Talent, Information, and Investment Strategies. Journal of Corporate Finance forthcoming
Included in
Business Administration, Management, and Operations Commons, Corporate Finance Commons, Finance and Financial Management Commons, Portfolio and Security Analysis Commons